Patient is King: A Patient-Centered Approach to Value

The American healthcare industry is going through an unprecedented transformation. The current fee-for-service model, historically focused on disease management, is rapidly evolving to an outcome-based system. All healthcare constituents, whether a physician practice, hospital, lab, nursing facility, or a payer, are currently designed to support a patient interaction or a visit.

The massive change from fee-for-service to population management, finds providers fighting to hold the line on costs while maintaining quality, attracting the most qualified staff, preparing for reform changes, and providing access to affordable healthcare. They are trying to achieve this through reduction in costs, improving operating efficiency and collecting maximum value for each unit of service.patient life cycle analytics

In order to achieve these goals, providers need to take a more holistic, patient-centered approach to value. This approach will focus equally on healthcare spending and treatment outcomes. Providers need to view the entire patient life cycle, from a physician visit -> hospital -> nursing facility -> home care, as one episode of care. Once a case is viewed from this angle, the next step is to examine every touch point of the patient care process, and to record and measure data related to cost, clinical activity, and reimbursement. Connecting all the disparate dots of a patient flow, allows providers to answer the following important questions:

  • Did outcome maximize the health status of the patient?
  • Did the case produce a margin or deficit?
  • Was the appropriate reimbursement billed and collected from all parties?

This is identified by CentraMed as the “Cost-2-Cash” approach to business intelligence. The derived net margin per visit is critical to support informed decisions that impact supply chain, cost centers, physician practices, compensation, billing practices and even determines if mergers into ever larger organizations will be required for survival.

In the majority of provider settings, deriving net margin per visit is easier said than done. The underlying data is stored and managed in disparate systems and spread across multiple information technology silos. Integration of these disparate technology platforms systems is expensive with the traditional system integration approach. Recent technical advances have made it easier to collect, integrate and analyze information from multiple sources. Since data for a single patient visit may come from various payers, hospitals, labs, and physician offices, providers should look to alternative solutions such as cloud based analytics that are far less expensive (few thousand dollars on a pay-as-you-go model versus traditional multi-million dollar initiatives) and faster to benefits (weeks versus multi-year projects). As providers learn more from these quick and low cost initiatives, they can change their priorities and the metrics they track to support the new healthcare model.


Integrated patient life cycle data empowers providers to slice and dice data at any touch point to analyze services by cost center, procedures, nurse-physician partnership, and payer performance; and gather other actionable intelligence. . In a recent McKinsey research, 84% of physicians said they are willing to change their behavior to reduce waste in healthcare. A Cleveland Institute study reported that physicians could be convinced to switch from expensive supplies to comparable and cheaper alternatives, when presented with metrics gathered from various transactional systems.

Providers need to look beyond the hope that somehow whatever margin is being lost will be made up with increased patient volume or average reimbursement increases by a payer. The strong providers are achieving good results not just by reducing expenses, but by developing (or adopting) best practices that enable them to deliver high-quality outcomes at a lower cost;  They understand that low costs don’t necessarily equate with great outcomes or great quality. Healthcare needs to strive to maximize the value of each health care dollar.

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